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Netherlands: Tax abuse presumption for share disposals within three years of demerger violates EU Merger Directive (Supreme Court decision)

Burden of proof wrongly allocated to taxpayer

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april 7, 2026

The Supreme Court on February 27, 2026, held in X NV v. State Secretary for Finance that a general presumption of tax abuse for demergers followed by a share disposal within three years is incompatible with the EU Merger Directive.

The court held that the burden of proof was wrongly allocated and that taxpayers cannot be presumed to lack valid commercial reasons solely based on the transaction structure. It clarified that both the objective of a demerger and the chosen route may be based on business considerations, including shareholder‑driven motives such as an intended sale.

The case was referred back to the Court of Appeal of ’s‑Hertogenbosch for reassessment.
 

For more information, contact a KPMG tax professional in the Netherlands:

Michel Ruijschop | ruijschop.michel@kpmg.com

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